Cost Accounting Midterm 2 Multiple Choice (Ch. 5, 6, & 11)

Beginning WIP Inventory (75% complete as to conversion) -- 7,500 units Started -- 27,000 units Ending WIP Inventory (15% complete as to conversion) -- 9,400 units Beginning WIP Inventory Costs: Material -- $25,500 Conversion -- $52,725 Current Period Costs: Material -- $34,300 Conversion -- $80,845 Assume that weighted average process costing is used. What is the cost per equivalent unit for material? a.) $0.99 b.) $1.18 c.) $1.64 d.) $1.73

$1.73

Beginning WIP Inventory (70% complete as to conversion) -- 6,000 units Started -- 24,000 units Ending WIP Inventory (10% complete as to conversion) -- 8,500 units Beginning WIP Inventory Costs: Material -- $23,400 Conversion -- $50,607 Current Period Costs: Material -- $31,500 Conversion -- $76,956 Assume that weighted average process costing is used. What is the cost per equivalent unit for material? a.) $1.31 b.) $0.55 c.) $1.83 d.) $1.05

$1.83

Joint processing costs for this production cycle are $8,000. X & Z Yards -- 1,500 & 2,200 Sales Price per yard at split-off -- $6.00 & $9.00 Disposal cost per yard at split-off -- $3.50 & $5.00 Further processing per yard -- $1.00 & $3.00 Final sale price per yard -- $7.50 & $11.25 Using net realizable value at split-off, what amount of joint processing cost is allocated to Product X (round to the nearest dollar)? a.) $4,000 b.) $5,610 c.) $2,390 d.) $5,500

$2,390

Joint processing costs for this production cycle are $8,000. X & Z Yards -- 1,500 & 2,200 Sales Price per yard at split-off -- $6.00 & $9.00 Disposal cost per yard at split-off -- $3.50 & $5.00 Further processing per yard -- $1.00 & $3.00 Final sale price per yard -- $7.50 & $11.25 Using sales value at split-off, what amount of joint processing cost is allocated to Product X (round to the nearest dollar)? a.) $5,500 b.) $3,243 c.) $2,500 d.)$4,000

$2,500

Direct Material Used - $2,500 Direct Labor Hours Worked - 15 Machine Time Used - 6 Direct Labor Rate per Hour - $7 Overhead Application Rate / Hour of Machine Time - $18 What was the total cost of Job #3051 for January? a.) $2,812 b.) $2,770 c.) $3,052 d.) $2,713

$2,713

Joint processing costs for this production cycle are $8,000. X & Z Yards -- 1,500 & 2,200 Sales Price per yard at split-off -- $6.00 & $9.00 Disposal cost per yard at split-off -- $3.50 & $5.00 Further processing per yard -- $1.00 & $3.00 Final sale price per yard -- $7.50 & $11.25 Using approximated net realizable value at split-off, what amount of joint processing cost is allocated to Product Z (round to the nearest dollar)? a.) $4,910 b.) $2,796 c.) $4,000 d.) $2,390

$4,910

Beginning WIP Inventory (70% complete as to conversion) -- 6,000 units Started -- 24,000 units Ending WIP Inventory (10% complete as to conversion) -- 8,500 units Beginning WIP Inventory Costs: Material -- $23,400 Conversion -- $50,607 Current Period Costs: Material -- $31,500 Conversion -- $76,956 Assume that weighted average process costing is used. What is the cost per equivalent unit for conversion? a.) $3.44 b.) $7.03 c.) $5.71 d.) $4.24

$4.24

In a job-order costing system, the dollar amount of the entry that debits Finished Goods Inventory and credits Work in Process Inventory is the sum of the costs charged to all jobs a.) Completed during the period. b.) Completed and sold during the period. c.) Started in process during the period. d.) In process during the period.

Completed during the period.

To compute equivalent units of production using the FIFO method of process costing, work for the current period must be stated in units a.) Completed during the period and units in ending inventory. b.) Completed from beginning inventory, units started and completed during the period, and units partially completed in ending inventory. c.) Processed during the period and units completed during the period. d.) Started during the period and units transferred out during the period.

Completed from beginning inventory, units started and completed during the period, and units partially completed in ending inventory.

In a cost of production report using process costing, transferred-in costs are similar to the a.) Cost transferred out to the next department. b.) Cost included in beginning inventory. c.) Cost of material added at the beginning of production. d.) Conversion cost added during the period.

Cost of material added at the beginning of production.

Jackson Company transferred 6,000 units to Finished Goods Inventory during August. On August 1, the company had 400 units on hand (35 percent complete as to both material and conversion costs). On August 31, the company had 750 units (20 percent complete as to material and 30 percent complete as to conversion costs). The number of units started and completed during August was: a.) 5,860 b.) 6,000 c.) 5,600 d.) 6,750

5,600

Fischer Company makes small metal containers. The company began October with 300 containers in process that were 35 percent complete as to material and 45 percent complete as to conversion costs. During the month, 6,000 containers were started. At month end, 1,900 containers were still in process (40 percent complete as to material and 75 percent complete as to conversion costs). Using the weighted average method, what are the equivalent units for conversion costs? a.) 5,825 b.) 4,265 c.) 6,300 d.) 5,590

5,825

In a normal cost system, a debit to Work in Process Inventory would NOT be made for a.) Applied Overhead b.) Actual Direct Labor c.) Actual Overhead d.) Actual Direct Material

Actual Overhead

The first step in determining the cost per EUP per cost component under the weighted average method is to a.) Add the beginning Work in Process Inventory cost to the current period's production cost. b.) Divide the current period's production cost by the equivalent units. c.) Subtract the beginning Work in Process Inventory cost from the current period's production cost. d.) Divide the current period's production cost into the EUP.

Add the beginning Work in Process Inventory cost to the current period's production cost.

Knowing specific job costs enables managers to effectively perform which of the following tasks? a.) Estimate costs of future jobs b.) Evaluate job performance c.) Establish realistic job selling prices d.) All answers are correct

All answers are correct

The split-off point is the point at which a.) Some products may first be sold. b.) Output is first identifiable as individual products. c.) Joint costs are allocated to joint products. d.) All of the above.

All of the above.

If two or more products share a common process before they are separated, the joint costs should be assigned in a manner that a.) Does not introduce an element of estimation into the process of accumulating costs for each product. b.) Maximizes total earnings. c.) Assigns a proportionate amount of the total cost to each product on a quantitative basis. d.) Minimizes variations in unit production costs.

Assigns a proportionate amount of the total cost to each product on a quantitative basis.

In a process costing system using the weighted average method, cost per equivalent unit for a given cost component is found by dividing which of the following by EUP? a.) Current period cost plus the cost of ending inventory b.) Only current period cost c.) Current period cost plus the cost of beginning inventory d.) Current period cost less the cost of beginning inventory

Current period cost plus the cost of beginning inventory

Which of the following journal entries records the accrual of the cost of indirect labor used in production? a.) Debit Manufacturing Overhead, credit Wages Payable b.) Debit Work in Process Inventory, credit Manufacturing Overhead c.) Debit Manufacturing Overhead, credit Work in Process Inventory d.) Debit Work in Process Inventory, credit Wages Payable

Debit Manufacturing Overhead, credit Wages Payable

A journal entry includes a debit to Work in Process Inventory and a credit to Raw Material Inventory. The explanation for this would be that a.) Raw material was purchased on account. b.) Direct material was placed into production. c.) Indirect material was placed into production. d.) Direct labor was used for production.

Direct material was placed into production.

Which of the following components of production are allocable as joint costs when a single manufacturing process produces several salable products? a.) Direct material and direct labor only b.) Overhead and direct material only c.) Direct material, direct labor, and overhead d.) Direct labor and overhead only

Direct material, direct labor, and overhead

The source document that records the amount of time an employee worked on a job and his/her pay rate is the a.) Employee time sheet. b.) Interoffice memo. c.) Labor requisition form. d.) Job-order cost sheet.

Employee time sheet

Equivalent units of production are equal to the a.) Number of units worked on during the period by a production department. b.) Units completed by a production department in the period. c.) Number of whole units that could have been completed if all work of the period had been used to produce whole units. d.) Identifiable units existing at the end of the period in a production department.

Number of whole units that could have been completed if all work of the period had been used to produce whole units.

In a job-order costing system, a.) Standards cannot be used b.) Costs are accumulated by departments and average among all jobs c.) An average cost per unit within a job cannot be computed d.) Overhead is typically assigned to jobs on the basis of some cost driver

Overhead is typically assigned to jobs on the basis of some cost driver

Which cost accumulation procedure is most applicable in continuous mass-production manufacturing environments? a.) Actual b.) Process c.) Job order d.) Standard

Process

Joint cost allocation is useful for a.) Product costing. b.) Evaluating managers' performance. c.) Decision making. d.) Control.

Product costing.

The difference between EUP calculated using FIFO and EUP calculated using weighted average is the equivalent units a.) Residing in ending Work in Process Inventory. b.) Uncompleted in Work in Process Inventory. c.) Residing in beginning Work in Process Inventory. d.) Started and completed during the period.

Residing in beginning Work in Process Inventory.

A producer of _____ would not use a process costing system. a.) Gasoline b.) Stained glass windows c.) Blank videotapes d.) Potato chips

Stained glass windows

Which of the following organizations would be most likely to use a job-order costing system? a.) A manufacturer of processed cheese food b.) The loan department of a bank c.) The check clearing department of a bank d.) A manufacturer of video cassette tapes

The loan department of a bank

Material is added at the beginning of a process in a process costing system. The beginning Work in Process Inventory for the process was 30 percent complete as to conversion costs. Using the FIFO method of costing, the number of equivalent units of material for the process during this period is equal to the a.) Units started and completed this period in the process. b.) Units started this period in the process plus the beginning Work in Process Inventory. c.) Beginning inventory this period for the process. d.) Units started and completed this period plus the units in ending Work in Process Inventory.

Units started and completed this period plus the units in ending Work in Process Inventory.

In a FIFO process costing system, which of the following are assumed to be completed first in the current period? a.) Units still in process b.) Units started last period c.) Units started this period d.) Units transferred out

Units started last period

The cost sheets for incomplete jobs at the end of the period comprise the subsidiary ledger for a.) Finished Goods Inventory. b.) Work in Process Inventory. c.) Supplies Inventory. d.) Raw Material Inventory.

Work in Process Inventory

The journal entry to apply overhead to production includes a credit to Manufacturing Overhead control and a debit to a.) Work in Process Inventory. b.) Finished Goods Inventory. c.) Cost of Goods Sold. d.) Raw Material Inventory.

Work in Process Inventory.

Joint costs are allocated to which of the following products? By-products / Scrap a.) Yes No b.) Yes Yes c.) No Yes d.) No No

Yes No

Which of the following is(are) the same between the weighted average and FIFO methods of calculating EUP's? Units to account for / EUP calculations / Total cost to account for a.) Yes No Yes b.) No Yes No c.) Yes No No d.) Yes Yes Yes

Yes No Yes

A process costing system does which of the following? Calculates EUP's / Assigns costs to inventories a.) No Yes b.) Yes Yes c.) Yes No d.) No No

Yes Yes

Which of the following is/are synonyms for joint products? Main products / Co-products a.) No No b.) Yes Yes c.) No Yes d.) Yes No

Yes Yes

A job-order costing system is likely to provide better (1) Inventory valuations for financial statements (2) Control over inventory (3) Information about ability to accept additional production work (1) (2) (3) a.) Yes No No b.) No Yes Yes c.) No No No d.) Yes Yes Yes

Yes Yes Yes

Which of the following costing methods of valuation are acceptable in a job-order costing system? Actual Material Cost, Standard Material Cost, Actual Labor Cost, Predetermined Overhead Cost a.) Yes Yes No Yes b.) No Yes Yes Yes c.) Yes Yes Yes Yes d.) Yes No Yes No

Yes Yes Yes Yes

The primary accounting document in a job-order costing system is a(n) a.) Job-order cost sheet. b.) Bill of materials. c.) Materials requisition. d.) Employee time sheet.

Job-order cost sheet

Which of the following statements about job-order cost sheets is true? a.) Job-order cost sheets show costs for direct material and direct labor, but not for manufacturing overhead since it is an applied amount. b.) Job-order cost sheets can serve as subsidiary ledger information for both Work in Process Inventory and Finished Goods Inventory. c.) All job-order cost sheets serve as the general ledger control account for Work in Process Inventory. d.) If material requisition forms are used, job-order cost sheets do not need to be maintained.

Job-order cost sheets can serve as subsidiary ledger information for both Work in Process Inventory and Finished Goods Inventory.

If a company obtains two salable products from the refining of one ore, the refining process should be accounted for as a(n) a.) Extractive process. b.) Joint process. c.) Mixed cost process. d.) Reduction process.

Joint process

The source document that records the amount of raw material that has been requested by production is the a.) Material Requisition b.) Job-Order Cost Sheet c.) Interoffice Memo d.) Bill of Lading

Material Requisition

Joint processing costs for this production cycle are $8,000. X & Z Yards -- 1,500 & 2,200 Sales Price per yard at split-off -- $6.00 & $9.00 Disposal cost per yard at split-off -- $3.50 & $5.00 Further processing per yard -- $1.00 & $3.00 Final sale price per yard -- $7.50 & $11.25 Using approximated net realizable value at split-off, what amount of joint processing cost is allocated to Product X (round to the nearest dollar)? a.) $5,204 b.) $3,090 c.) $2,390 d.) $4,000

$3,090

Joint processing costs for this production cycle are $8,000. X & Z Yards -- 1,500 & 2,200 Sales Price per yard at split-off -- $6.00 & $9.00 Disposal cost per yard at split-off -- $3.50 & $5.00 Further processing per yard -- $1.00 & $3.00 Final sale price per yard -- $7.50 & $11.25 Using a physical measure, what amount of joint processing cost is allocated to Product X (round to the nearest dollar)? a.) $3,243 b.) $5,500 c.) $4,757 d.) $4,000

$3,243

Beginning WIP Inventory (75% complete as to conversion) -- 7,500 units Started -- 27,000 units Ending WIP Inventory (15% complete as to conversion) -- 9,400 units Beginning WIP Inventory Costs: Material -- $25,500 Conversion -- $52,725 Current Period Costs: Material -- $34,300 Conversion -- $80,845 Assume that FIFO process costing is used. What is the cost per equivalent unit for conversion? a.) $3.87 b.) $3.05 c.) $6.40 d.) $4.25

$3.87

Raw Material Used - $120,000 Direct Labor per Hour - $8.50 Overhead Applied Based on Direct Labor Cost - 120% Direct material was requisitioned as follows for each job respectively: 30 percent (Job #6), 25 percent (Job #9), and 25 percent (Job #13); the balance of the requisitions was considered indirect. Direct labor hours per job are 2,500; 3,100; and 4,200; respectively. Indirect labor is $33,000. Other actual overhead costs totaled $36,000. What is the total amount of overhead applied to Job #9? a.) $30,000 b.) $31,620 c.) $26,350 d.) $18,250

$31,620

Beginning Balance - $24,000 Direct Material Used - $70,000 Direct Labor Incurred - $60,000 Applied Overheard - $48,000 Cost of Goods Manufactured - $185,000 Charleston Company applies overhead on the basis of direct labor cost. There was only one job left in Work in Process at the end of April which contained $5,600 of overhead. What amount of direct material was included in this job? a.) $4,480 b.) $6,920 c.) $4,400 d.) $8,000

$4,400

Joint processing costs for this production cycle are $8,000. X & Z Yards -- 1,500 & 2,200 Sales Price per yard at split-off -- $6.00 & $9.00 Disposal cost per yard at split-off -- $3.50 & $5.00 Further processing per yard -- $1.00 & $3.00 Final sale price per yard -- $7.50 & $11.25 Using a physical measure, what amount of joint processing cost is allocated to Product Z (round to the nearest dollar)? a.) $4,000 b.) $5,500 c.) $3,243 d.) $4,757

$4,757

Joint processing costs for this production cycle are $8,000. X & Z Yards -- 1,500 & 2,200 Sales Price per yard at split-off -- $6.00 & $9.00 Disposal cost per yard at split-off -- $3.50 & $5.00 Further processing per yard -- $1.00 & $3.00 Final sale price per yard -- $7.50 & $11.25 Using sales value at split-off, what amount of joint processing cost is allocated to Product Z (round to the nearest dollar)? a.) $4,757 b.) $2,500 c.) $5,500 d.) $4,000

$5,500

Joint processing costs for this production cycle are $8,000. X & Z Yards -- 1,500 & 2,200 Sales Price per yard at split-off -- $6.00 & $9.00 Disposal cost per yard at split-off -- $3.50 & $5.00 Further processing per yard -- $1.00 & $3.00 Final sale price per yard -- $7.50 & $11.25 Using net realizable value at split-off, what amount of joint processing cost is allocated to Product Z (round to the nearest dollar)? a.) $5,610 b.) $5,500 c.) $2,390 d.) $4,000

$5,610

Raw Material Used - $120,000 Direct Labor per Hour - $8.50 Overhead Applied Based on Direct Labor Cost - 120% Direct material was requisitioned as follows for each job respectively: 30 percent (Job #6), 25 percent (Job #9), and 25 percent (Job #13); the balance of the requisitions was considered indirect. Direct labor hours per job are 2,500; 3,100; and 4,200; respectively. Indirect labor is $33,000. Other actual overhead costs totaled $36,000. What is the prime cost of Job #6? a.) $73,250 b.) $42,250 c.) $57,250 d.) $82,750

$57,250

Direct Material - $5,000 Direct Labor (100 hours @ $7.25) - $725 Machine Hours Incurred - 40 Predetermined Overhead Rate per Machine Hour - $26 At the end of September, what total cost appears on the job cost sheet for Job #656? a.) $5,765 b.) $5,725 c.) $6,765 d.) $8,325

$6,765

Raw Material Used - $120,000 Direct Labor per Hour - $8.50 Overhead Applied Based on Direct Labor Cost - 120% Direct material was requisitioned as follows for each job respectively: 30 percent (Job #6), 25 percent (Job #9), and 25 percent (Job #13); the balance of the requisitions was considered indirect. Direct labor hours per job are 2,500; 3,100; and 4,200; respectively. Indirect labor is $33,000. Other actual overhead costs totaled $36,000. What is the total amount of actual overhead? a.) $36,000 b.) $99,960 c.) $69,000 d.) $93,000

$93,000

Beginning Inv. (30% complete to Material B and 60% complete for conversion) -- 700 units (2,000 at start) Ending Inv. (50% complete to Material B and 80% complete as to conversion) -- 500 units Beginning Inv. Costs: Material A -- $14,270, Material B -- $5,950, Conversion -- $5,640 Current Period Costs: Material A -- $40,00, Material B -- $70,000, Conversion -- $98,100 Material A (start of production), Material B added (uniformly throughout) Using WA process costing, EUP units for Materials A & B. a.) 2,700 and 2,450, respectively b.) 2,240 and 2,700, respectively c.) 2,700 and 2,280, respectively d.) 2,000 and 2,240, respectively

2,700 and 2,450, respectively

Beginning WIP Inventory (70% complete as to conversion) -- 6,000 units Started -- 24,000 units Ending WIP Inventory (10% complete as to conversion) -- 8,500 units Beginning WIP Inventory Costs: Material -- $23,400 Conversion -- $50,607 Current Period Costs: Material -- $31,500 Conversion -- $76,956 How many units were transferred out in August? a.) 24,000 b.) 18,000 c.) 15,500 d.) 21,500

21,500

Riggs Company uses a FIFO process costing system. The company had 5,000 units that were 60 percent complete as to conversion costs at the beginning of the month. The company started 22,000 units this period and had 7,000 units in ending Work in Process Inventory that were 35 percent complete as to conversion costs. What are equivalent units for material, if material is added at the beginning of the process? a.) 18,000 b.) 25,000 c.) 22,000 d.) 27,000

22,000

Beginning WIP Inventory (75% complete as to conversion) -- 7,500 units Started -- 27,000 units Ending WIP Inventory (15% complete as to conversion) -- 9,400 units Beginning WIP Inventory Costs: Material -- $25,500 Conversion -- $52,725 Current Period Costs: Material -- $34,300 Conversion -- $80,845 How many units were transferred out in May? a.) 25,100 b.) 27,000 c.) 17,600 d.) 19,500

25,100

Overhead is applied to jobs in a job-order costing system a.) At the end of a period. b.) At the end of a period or as jobs are completed, whichever is earlier. c.) At the end of a period or as jobs are completed, whichever is later. d.) As jobs are completed.

At the end of a period or as jobs are completed, whichever is earlier.

Each of the following is a method to allocate joint costs EXCEPT a.) Relative net realizable value. b.) Relative sales value. c.) Relative weight, volume, or linear measure. d.) Average unit cost.

Average unit cost

Which of the following is subtracted from weighted average EUP to derive FIFO EUP? a.) Ending WIP EUP completed b.) Beginning WIP EUP completed in current period c.) Ending WIP EUP not completed d.) Beginning WIP EUP produced in prior period

Beginning WIP EUP produced in prior period

In a perpetual inventory system, a transaction that requires two journal entries (or one compound entry) is needed when a.) Goods are finished and transferred out of Work in Process Inventory. b.) Goods are sold for either cash or on account. c.) Raw materials are purchased on account. d.) Overhead is applied to Work in Process Inventory.

Goods are sold for either cash or on account.

When allocating joint process cost based on tons of output, all products will a.) Have no disposal costs at the split-off point. b.) Be salable at split-off. c.) Have a sales value greater than their costs. d.) Have the same joint cost per ton.

Have the same joint cost per ton.

Job-order costing and process costing have which of the following characteristics? Job-order Costing / Process Costing a.) Homogenous products heterogeneous products and small quantities and large quantities b.) Heterogeneous products homogeneous products and large quantities and large quantities c.) Homogeneous products heterogeneous products and large quantities and small quantities d.) Heterogeneous products homogeneous products and small quantities and large quantities

Heterogeneous products homogeneous products and small quantities and large quantities

The primary difference between the FIFO and weighted average methods of process costing is a.) In the treatment of current period production costs. b.) In the treatment of spoiled units. c.) In the treatment of beginning Work in Process Inventory. d.) None of the above.

In the treatment of beginning Work in Process Inventory.

All costs that are incurred between the split-off point and the point of sale are known as a.) Joint cost. b.) Committed costs. c.) Incremental separate costs. d.) Sunk costs.

Incremental separate costs.